Affordable Care Act
At a July town hall in Nashville, Tennessee, President Barack Obama reassured Tennesseans fears of a spike in health insurance premiums saying, “my expectations is that they’ll come in significantly lower than what’s being requested.”
Julie Mix McPeak, the state’s insurance commissioner, answered on Friday by approving the full 36.3% increase sought by the biggest health plan in the state, BlueCross BlueShield of Tennessee.
She said the insurer’s large increase for 2016 was needed to cover higher-than-expected claims from sick people who signed up for individual policies in the first two years of the Affordable Care Act.
Several regulators around the country agree with her, and have approved all or most of the big premium increases sought by the largest health plans in their states for the new sign-up season that begins Nov. 1
Not all states have made their rate decisions, and some have approved relatively modest increases. A number of the states with lower average increases this year had higher rates to begin with. Some also performed better with enrollment under the law. Insurance premiums vary from state to state, for a number of reasons including regional disparities in the costs of care.
Ms. McPeak said she’s required to protect state residents by blocking unjustified increases but also guaranteeing that health plans stay financially sound. “Politics, and any opposition to the ACA, doesn’t have anything to do with it,” she said. “Do I wish they were lower? Absolutely, because I know what it means to consumers.”
Read more: (The Wall Street Journal)
The next fight over the Affordable Care Act may center on one of its most powerful provisions to contain health care costs — the “Cadillac tax”.
The Affordable Care Act’s Cadillac plan tax takes effect in 2018. This is a 40% nondeductible excise tax on employer-provided health coverage that provides high-cost benefits.
The plan amounts that could trigger the Cadillac tax in 2018 are $10,200 a year for single employee coverage and $27,500 for family coverage. The threshold will be adjusted annually for inflation.
A new analysis released this week by the Kaiser Family Foundation estimated that just over a quarter of employers that offer health plans would pay the 40 percent tax in 2018 on at least one plan if they don’t make changes. The National Business Group on Health, a nonprofit association of large employers, found that half of its members reported that at least one of their health plans would trigger the tax in 2018. Both groups predicted that the proportion of employers affected would go up significantly over time.
“The ‘Cadillac tax’ will have a very powerful effect on health care costs, and that certainly a good thing. But the way the tax helps to keep health costs down is primarily by shifting it to workers,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation who did the analysis.
In late July, The Alliance to Fight the 40 launched a concerted campaign against the tax, backed by a coalition that puts the insurer Cigna, the labor group Unite Here, the utility Eversource Energy, and school districts on the same side. The Hill reported that House Republicans will likely put repealing the tax on the fall agenda.
Read more: (The Washington Post, Bankrate)
A new study finds that 75% of California’s Obamacare health plans have narrow physician networks — more limited choices than all but three other states.
The latest report examines health plans sold to consumers last year under the Affordable Care Act and shows wide variation in the commonness of narrow networks across the country.
According to the report, only Georgia, Florida, and Oklahoma had a higher percentage of small provider networks than California did in the insurance company directories.
Nationwide, 41% of networks were labeled narrow, meaning they included 25% or less of the physicians in a rating area.
To hold down premiums under the health law, big insurers such as Anthem Inc. and Blue Shield of California cut the number of doctors and hospitals available to patients.
Dan Polsky, executive director of the Leonard Davis Institute of Health Economics at Penn and the lead researcher, said narrow networks can be an effective way to control medical costs, but also recognizes that consumers still don’t have an easy way to tell whether a health plan is narrow or not before enrolling.
State and federal regulators have been grappling with how to respond to consumer complaints about skinnier networks and inaccurate information in provider directories.
“Network composition is a major way in which insurance companies can attempt to control costs in the marketplace, and for consumers there is often a tradeoff between access and price,” said Kathy Hempstead, director of health coverage issues at the Robert Wood Johnson Foundation, which published the report Monday.
Read more: (Los Angeles Times)
The next Open Enrollment Period or sign-up season for health insurance doesn’t start for another couple of months, but the next few days are crucial for hundreds of thousands of customers at risk for losing financial aid when they renew coverage for 2016.
An estimated 1.8 million households that got subsidies for their premiums last year have failed to file a 2014 tax return as required by law, or left out key IRS paperwork.
Because of coordination issues between the IRS and marketplaces like HealthCare.gov, consumers who keep procrastinating into the fall are taking chances with their financial aid, according to insurers and the tax agency. That means, for example, that someone who’s been paying a monthly premium of $90 could suddenly get hit with a bill for $360.
Government officials say they have a backstop planned that should help many procrastinators. Nonetheless, insurers and advocacy groups say they’ve been told the best way returning customers can avoid hassles is to file their taxes correctly by Aug. 31.
“You don’t want to get to December and realize that your subsidy amount isn’t there,” said Clare Krusing, spokeswoman for the industry group America’s Health Insurance Plans. Sign-up season starts Nov. 1, and insurers typically send bills for January in mid-December.
Read more: (The New York Times)